Job growth likely topped 160,000 in April

Unemployment rate projected to remain above 8%

WASHINGTON (MarketWatch) — The U.S. likely added more jobs in April than it did in March, economists say, but the pace of hiring is too slow to make a big dent in the nation’s high unemployment rate.

The economy gained 163,000 jobs last month and the unemployment rate remained flat at 8.2%, according to analysts polled by MarketWatch.

Hiring tailed off sharply in March, based on the government’s preliminary estimate released one month ago. The U.S. added just 120,000 jobs in March vs. a monthly average of 246,000 during the December-to-February period.

Most economists believe one of the warmest winters on record boosted employment at the start of 2012. Companies that normally lay off some workers during the colder months, such as construction firms, kept them on payrolls. And other companies hired earlier than they usually do in a new year.

What’s more, the employment data may have been skewed by a flawed government process that tries to adjust the hiring numbers to account for seasonal differences.

“Seasonal-adjustment factors often make jobs numbers appear stronger in late winter and weaker in the early spring,” said Paul Edelstein, director of financial economics at IHS Global Insight. The same pattern happened last year, he pointed out.

The result is what economists call “payback.” “We’re likely to see a couple of months of it,” Edelstein said.

There’s reason to suspect, however, that the March numbers were understated. In 20 of the past 22 months, net employment has been revised above the original reading, with an average increase of 39,000, economists at Deutsche Bank calculate.

Fresh worries

Still, the downshift in job creation has raised questions about whether the economy and labor market are getting weaker. A slew of recent economic reports, for instance, suggest some signs of softness, including the latest employment report by the payroll processor ADP. The firm on Wednesday said hiring fell in April to its lowest level in seven months. Read roundup of what other employment indicators say.

The downturn in Europe and slower growth in China have also added to the fresh worries.

“There are still concerns about what is happening in Europe and China,” said senior economist Jennifer Lee of BMO Capital Markets. “Businesses are sitting on a lot cash, but they will be very cautious about hiring until they get more clarity on the economy.”

For now, most economists are sticking to the middle of the road. They say the economy is likely to grow around 2% or so in 2012 and add about 150,000 to 200,000 jobs a month.

That’s enough to soak up the natural increase in the labor force each year and slowly whittle down the jobless rate. Yet it’s far too slow to fully restore the economy to good health.

“It’s decent but not enough to pull down the unemployment rate down quickly,” Edelstein said.

What could change the prevailing view of gradually strengthening economy is a poor April employment number: 100,000 or less.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.